OKCoin becomes biggest USD/BTC exchange

Only a week after exiting beta testing for its new bitcoin-to-dollar exchange platform, China’s OKCoin has skyrocketed past Western exchanges in terms of volume. As CoinDesk reports, the USD/BTC trading pair on the site had a volume of 16,342 BTC yesterday, handily beating Bitfinex’s 15,552 BTC volume, as well as Bitstamp’s 14,463 and BTC-e’s 6,556. OKCoin is already the largest exchange by volume in the Chinese bitcoin market.

Speaking with CoinDesk, OKCoin CTO Changpeng Zhao said the news was “surprising,” and was unable to point to a clear reason for the USD volume. “Regarding the increase in volume, honestly, we don’t know exactly why,” Zhao said. “We focus on making a better product, and believe the users will follow. And the data tends to agree with us.”

One part of the equation might be OKCoin’s fee-free trading model, which effectively encourages high-frequency trading. This practice is common across Chinese bitcoin exchanges, and a result Chinese exchanges often have three to four times the volume of their fee-based Western counterparts. CoinDesk also noted that OKCoin’s new “Maker-Taker” fee model, which was implemented last week. Under that system, market “makers” can earn fees from “takers” by successfully setting the BTC price. This system encourages additional liquidity in the market, but it remains unclear if this is the cause of the massive spike in volume.

OKCoin is unlikely to dethrone Bitfinex or Bitstamp in the coming months, but the entry of a new USD exchange is significant. With several new U.S. based exchanges in the works, hints that other Asian exchanges are on the verge of breaking into the international USD market, and the potential pressure of Circle and PayPal on demand, the not-exactly stable bitcoin-exchange system can look forward to a new round of disruptions in the coming months.